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You can divide the world's wealth into wealth that was created by human hands and wealth which was 'created' by the planet (land, mineral/ore/oil deposits, etc.

You can divide the world's wealth into wealth that was created by human hands and wealth which was 'created' by the planet (land, mineral/ore/oil deposits, etc.). I don't see why it isn't fair to people keep the wealth they create and just divide up the wealth created by the planet equally.

socialist_coder 9y ago
The article (and the recent Piketty book) is trying to explain exactly why it isn't fair for people to keep the wealth that they create: because it enables them and their offspring to stay wealthy at the expense of everyone else. Once you have wealth, there is no mechanism that removes it. And, this process occurs both in human society and in nature.
- crdoconnor 9y ago
  I don't think that's true, and I don't think Piketty actually did say that. Where people manage to enable themselves and their offspring to grow their wealth geometrically at the expense of everybody else they always do so by using (legal) means of siphoning off both natural wealth and wealth created by others. If you inherited a chunk of stock which your parents bought which grew in value and paid out dividends since they died, for instance, that increase in value is real but it wasn't created by them or by you. Who did create that wealth is context dependent (most of the time it's going to be employees working for the corporation), but the fact remains that it wasn't you or your parents. The same applies if you inherit a bond portfolio (the wealth is created by the people paying you interest) or land titles (in, e.g. a large city, that wealth is created by the people who live and work surrounding that land). That's largely what is driving the inequality Piketty is measuring. 90% of the 0.1% siphoned all their wealth from others (e.g. alice walton types) and created none themselves and, IMHO, all of them siphoned most of the wealth they hold - even the ones that are dubiously considered 'self made'. I think by aiming to create a system where the people get to keep the wealth they create and share the wealth nobody created (and the wealth created that isn't so easy to attribute), inequality will naturally decrease to a more sustainable level that people will consider fair. In practical terms this means legislators should be encouraged to raise taxes on the very wealthy who very obviously siphoned wealth money first (e.g. the Duke of Westminster) before going after the wealthy where it isn't clear how much they created and how much was siphoned (e.g. the estate of Steve Jobs) and developing better ways of separating 'created' from 'siphoned' so that they can be treated differently.
TheOtherHobbes 9y ago
If I keep slaves, I'm "creating wealth". But it's hard to argue morally that I have a right to that wealth. The difference between keeping slaves and having employees is one of degree, not of essential quality. Most people work because they have to, to avoid starvation and homelessness, not because they want to. So the element of involuntary compulsion remains, but the punishment for non-compliance is deferred and obscured. It's probably hard to organise a non-cornucopian society without some element of compulsion. But the real issue is how the benefits are distributed, how much free time and opportunity remains after the compulsory work is done, and how easy it is to lead a privileged life which avoids compulsory work. I suspect that ultimately there's a self-centred moral view in which all transactions are seen purely in terms of personal losses/gains and hierarchies of status, and a wider synergistic moral view in which network effects generate social benefits that also boost individual gains - a kind of social trickle down, where the hierarchies are flatter, the status differences are less extreme, but the culture as a whole has the potential to innovate more quickly and creatively. It's very hard for someone who lives in the self-centred view to accept that some loss of relative personal status is worth increased creativity and opportunity elsewhere.
- gozur88 9y ago
  >The difference between keeping slaves and having employees is one of degree, not of essential quality. No. It is one of essential quality, because your employees are working for you by mutual assent and your slaves aren't. Employees can quit and work for someone else if they decide it's in their interest, whereas slaves are stuck with you no matter how you treat them.
  - escape_goat 9y ago
    I see no difference. Surely your slaves may refuse to work if they decide that it's in their own interest; refuse to eat, perhaps, and spurn threats of torture and death, until you have no choice but to be done with them. I think it merely a matter of the strength of their conviction, that their interest lies not in survival, but in the refusal of subjugation. By your logic, the employee is only ever free when possessed of the freedom to serve some other, instead, at their own discretion; insofar as doubt, a paucity of jobs, the risk of losing health coverage and the like might erode their confidence in this ability, you would regard them as being in chains. Thus it must be that it is with the risks presented by the unknown, that they find their interest lies; elsewise, none of them would ever be free without a job offer in hand.
alexmat 9y ago
What about future generations, how much should be allocated to them?
- crdoconnor 9y ago
  Ideally, allocate all of the natural wealth as equally as possible among all of the world's inhabitants all of the time. New person gets born -> they get the same (now slightly smaller) share as everybody else. Why, do you not think that's fair?
  - alexmat 9y ago
    How many slices can you get from one pie?
psyc 9y ago
This seems like a meaningful distinction. Notably, ownership of land (by extension, resources) was historically decided by brute force, not by free economic transactions. Contenders killed each other until one got tired of the killing and acknowledged the claim of the winner.
gozur88 9y ago
Say everybody has ten acres of land, because we've taken all the land and divided it out among the world's population. Let's leave aside, for a moment, that's pretty much impossible, since everybody will want beachfront property in Hawaii, say, and not a patch of desert in BFE. Now say I have fifteen children, and you have one. In the next reallocation, do we really divide out the land such that my family ends up with fifteen times the land your family has? Think about the incentives that kind of scheme creates. Furthermore, there's a tragedy of the commons problem. If we all own the land, or it gets re-divided every generation, I have no reason to improve it. I'll get rich turning my land into a toxic wasted dump, because I don't have any interest in maintaining its value. In the end, that's why we have property ownership. People don't take care of things they don't own.
- anigbrowl 9y ago
  This argument assumes its conclusion, as well as relying on some extreme edge cases (how many people have 15 children in real life? Hardly anyone). Also, I'll take that patch of desert, not least because I like my solitude.
- crdoconnor 9y ago
  You don't have to give everybody 10 acres of land, and in any case, not every 10 acres is as valuable as every other. You can let everybody rent their land, according to its value from the state and distribute the income equally. That way the land will be used efficiently. The incentives that creates are better than the incentives we have right now. Either you pay eye watering rents to the state to live in a house on the immensely valuable land of downtown San Francisco or you yield the land to a property developer who will build high rises that will match the massive demand there is for people to live there. There are more (and better) solutions to the tragedy of the commons than just privatizing everything and, as we can see, people don't necessarily take care of the things they do own. Anti-dumping laws exist for a reason.
- Can_Not 9y ago
  But you wouldn't literally divide natural asserts evenly, you would structure society arround not having rent seekers be a parasite on your right to a good, water, and shelter.

socialist_coder 9y ago

The article (and the recent Piketty book) is trying to explain exactly why it isn't fair for people to keep the wealth that they create: because it enables them and their offspring to stay wealthy at the expense of everyone else. Once you have wealth, there is no mechanism that removes it. And, this process occurs both in human society and in nature.

crdoconnor 9y ago
I don't think that's true, and I don't think Piketty actually did say that. Where people manage to enable themselves and their offspring to grow their wealth geometrically at the expense of everybody else they always do so by using (legal) means of siphoning off both natural wealth and wealth created by others. If you inherited a chunk of stock which your parents bought which grew in value and paid out dividends since they died, for instance, that increase in value is real but it wasn't created by them or by you. Who did create that wealth is context dependent (most of the time it's going to be employees working for the corporation), but the fact remains that it wasn't you or your parents. The same applies if you inherit a bond portfolio (the wealth is created by the people paying you interest) or land titles (in, e.g. a large city, that wealth is created by the people who live and work surrounding that land). That's largely what is driving the inequality Piketty is measuring. 90% of the 0.1% siphoned all their wealth from others (e.g. alice walton types) and created none themselves and, IMHO, all of them siphoned most of the wealth they hold - even the ones that are dubiously considered 'self made'. I think by aiming to create a system where the people get to keep the wealth they create and share the wealth nobody created (and the wealth created that isn't so easy to attribute), inequality will naturally decrease to a more sustainable level that people will consider fair. In practical terms this means legislators should be encouraged to raise taxes on the very wealthy who very obviously siphoned wealth money first (e.g. the Duke of Westminster) before going after the wealthy where it isn't clear how much they created and how much was siphoned (e.g. the estate of Steve Jobs) and developing better ways of separating 'created' from 'siphoned' so that they can be treated differently.

TheOtherHobbes 9y ago

If I keep slaves, I'm "creating wealth". But it's hard to argue morally that I have a right to that wealth. The difference between keeping slaves and having employees is one of degree, not of essential quality. Most people work because they have to, to avoid starvation and homelessness, not because they want to. So the element of involuntary compulsion remains, but the punishment for non-compliance is deferred and obscured. It's probably hard to organise a non-cornucopian society without some element of compulsion. But the real issue is how the benefits are distributed, how much free time and opportunity remains after the compulsory work is done, and how easy it is to lead a privileged life which avoids compulsory work. I suspect that ultimately there's a self-centred moral view in which all transactions are seen purely in terms of personal losses/gains and hierarchies of status, and a wider synergistic moral view in which network effects generate social benefits that also boost individual gains - a kind of social trickle down, where the hierarchies are flatter, the status differences are less extreme, but the culture as a whole has the potential to innovate more quickly and creatively. It's very hard for someone who lives in the self-centred view to accept that some loss of relative personal status is worth increased creativity and opportunity elsewhere.

gozur88 9y ago
>The difference between keeping slaves and having employees is one of degree, not of essential quality. No. It is one of essential quality, because your employees are working for you by mutual assent and your slaves aren't. Employees can quit and work for someone else if they decide it's in their interest, whereas slaves are stuck with you no matter how you treat them.
- escape_goat 9y ago
  I see no difference. Surely your slaves may refuse to work if they decide that it's in their own interest; refuse to eat, perhaps, and spurn threats of torture and death, until you have no choice but to be done with them. I think it merely a matter of the strength of their conviction, that their interest lies not in survival, but in the refusal of subjugation. By your logic, the employee is only ever free when possessed of the freedom to serve some other, instead, at their own discretion; insofar as doubt, a paucity of jobs, the risk of losing health coverage and the like might erode their confidence in this ability, you would regard them as being in chains. Thus it must be that it is with the risks presented by the unknown, that they find their interest lies; elsewise, none of them would ever be free without a job offer in hand.

alexmat 9y ago

What about future generations, how much should be allocated to them?

crdoconnor 9y ago
Ideally, allocate all of the natural wealth as equally as possible among all of the world's inhabitants all of the time. New person gets born -> they get the same (now slightly smaller) share as everybody else. Why, do you not think that's fair?
- alexmat 9y ago
  How many slices can you get from one pie?

psyc 9y ago

This seems like a meaningful distinction. Notably, ownership of land (by extension, resources) was historically decided by brute force, not by free economic transactions. Contenders killed each other until one got tired of the killing and acknowledged the claim of the winner.

gozur88 9y ago

Say everybody has ten acres of land, because we've taken all the land and divided it out among the world's population. Let's leave aside, for a moment, that's pretty much impossible, since everybody will want beachfront property in Hawaii, say, and not a patch of desert in BFE. Now say I have fifteen children, and you have one. In the next reallocation, do we really divide out the land such that my family ends up with fifteen times the land your family has? Think about the incentives that kind of scheme creates. Furthermore, there's a tragedy of the commons problem. If we all own the land, or it gets re-divided every generation, I have no reason to improve it. I'll get rich turning my land into a toxic wasted dump, because I don't have any interest in maintaining its value. In the end, that's why we have property ownership. People don't take care of things they don't own.

anigbrowl 9y ago
This argument assumes its conclusion, as well as relying on some extreme edge cases (how many people have 15 children in real life? Hardly anyone). Also, I'll take that patch of desert, not least because I like my solitude.
crdoconnor 9y ago
You don't have to give everybody 10 acres of land, and in any case, not every 10 acres is as valuable as every other. You can let everybody rent their land, according to its value from the state and distribute the income equally. That way the land will be used efficiently. The incentives that creates are better than the incentives we have right now. Either you pay eye watering rents to the state to live in a house on the immensely valuable land of downtown San Francisco or you yield the land to a property developer who will build high rises that will match the massive demand there is for people to live there. There are more (and better) solutions to the tragedy of the commons than just privatizing everything and, as we can see, people don't necessarily take care of the things they do own. Anti-dumping laws exist for a reason.
Can_Not 9y ago
But you wouldn't literally divide natural asserts evenly, you would structure society arround not having rent seekers be a parasite on your right to a good, water, and shelter.